Local housing allowance

I suspect that there is not much a lawyer could find that interesting about individual subsidy, but this week the coalescence of housing law and policy is the focus of this post.  Bear with me.  The first thing that alerted me to this issue this week was a report from the IPPR, The Homes that Children Deserve.  This contained a statistic (of which I was unaware) that, in Wales, the local housing allowance shortfalls are 69%, compared with an average across GB of 49%, with Scotland having the lowest percentage of 31%.  Consider also this fact: “There is also considerable variation between different areas, for example in Neath Port Talbot, Wales, just 26 per cent of UC families claiming housing support in the PRS have housing costs which are met by LHA …” (the comparator was East Lothian).

I was, and am, rather shocked by these statistics; what they mean is that the housing element of UC is not covering most rents in the PRS, leading households either to negotiate with landlords for a lower rent or try to find cheaper accommodation.  This is a race to the bottom.  The House of Commons research briefing on the LHA tells us that “Building on earlier reforms, LHA was designed to control public spending on housing support, prevent rises in unregulated rents from being fully covered by Housing Benefit, and discourage benefit claimants from living in more expensive properties than they need”.

On 31st January 2025, the LHA rates were announced.  We had already been told that they would be frozen for 2025-6 (last year was the first year that they had been uplifted since 2020-21).  LHA is set against the 30th percentile of local rents.  The basis for doing so is that people requiring the housing element of UC should not be seeking more expensive accommodation; the idea behind setting it against the 30th percentile, then, was that 30% of available properties would be affordable to people on UC.  However, the problem of freezing LHA rates means that it is dislodged from that equation.  Consider this table for Cardiff (I just picked out Cardiff because, well, it’s where I work; but the UC figure does not meet the 30th percentile anywhere other than for shared accommodation in a few places):

What this means is that a considerable proportion of available PRS property is going to be unaffordable for those who require the housing element of UC (without factoring in the benefit cap).  So, even though we might ban discrimination against those in receipt of benefits in Wales by a legislative consent memorandum (controversially), those households will be excluded on affordability grounds in any event.  We might ask about the point of the LCM (beyond symbolism).

At the Westminster Parliament, not unnaturally, Angela Rayner (the Secretary of State for Housing, Communities and Local Government) gave evidence to the Select Committee that no equality impact assessment had been carried out on that LHA freeze because of the difficulty of conducting such an assessment on individual elements of the budget.  I suspect that eyebrows might be raised by that response among m’learned friends in the legal profession.  The Chair of the select committee (Florence Ashalomi), wrote to Angela Rayner on 25th January asking a further pertinent question: “If it was not possible to perform an impact assessment on individual elements of the Budget, what assessment, if any, did the Department make of these two policy decisions and was an impact assessment carried out on the Budget as a whole?”.

There can be only one real outcome of these changes, though, and we probably don’t need an EIA to tell us about that.